On May 15, 2014, Governor O’Malley signed a bill increasing the amount of wealth that can pass to heirs free of Maryland estate tax. Prior to the passage of this new law the applicable exclusion is $1,000,000, meaning that $1,000,000 can pass to heirs free of Maryland estate tax. After the end of 2014, the applicable exclusion increases gradually:

For taxpayers dying in 2015, the applicable exclusion is $1,500,000;

For taxpayers dying in 2016, the applicable exclusion is $2,000,000;

For taxpayers dying in 2017, the applicable exclusion is $3,000,000;

For taxpayers dying in 2018, the applicable exclusion is $4,000,000; and

For taxpayers dying in 2019 or later, the applicable exclusion is tied to the federal estate tax applicable exclusion amount, which is $5,000,000 indexed for inflation, currently $5,340,000.

As was the case before the new law, unlimited amounts may pass to a surviving spouse and charity free of Maryland estate tax, and there remain special exemptions for qualified agricultural property. The current Maryland inheritance tax still applies to amounts received by individuals unrelated or distantly related to the decedent.

Although for years beginning in 2019, the stated amount that can pass free of Maryland estate tax will be the same as the amount that can pass free of federal estate tax, there remain important differences between the federal and Maryland estate taxes that could result in the two taxes behaving differently. Significantly, there is no Maryland gift tax if you make gifts exceeding your applicable exclusion during your lifetime, but there is a federal gift tax.

ASSET has worked to bring about a change in estate tax collection in Maryland and testified before the Ways & Means committee during the summer study of this issue. ASSET continues to push for a change in collection method on both a state and federal level.

Americans Standing for the Simplification of the Estate Tax was founded in 2010 in order to change the collection method for the Estate Tax. The group includes private businesses, family farms, and individuals who believe that so long as the IRS reqires the estate tax be paid, there is a simpler collection method that allows the same cash flow to the treasury, yet doesn’t cause jobs losses or the closure of businesses.

I believe in paying my taxes when I truly owe them. However, i have a problem that maybe you can help me with. Maybe not or you can direct me to an advocate. I am the PR for my late Uncle’s Estate. He passed 1-10-2011. We filed all necessary paperwork, got appraisals for the land and ordered inventory of personal property. Dispersed personal property as was directed except for the 38 acres of my Grandparent’s farm.

We wanted to close the Estate as we sold the property after working with a developer to secure the Engineering plan, etc to shop to a Builder. We did very well. Now the Register of Wills wants us to use a “supplemental inventory” and use the price of the sale of the property as the inventory price. First we did nothing wrong! Also They want us to pay an additional 1.6 million dollars in Inheritance Tax on this sale price. Can they do this? We spent over 1 million dollars over the past 3 years for surveys, studies, soil tests and engineering fees plus other fees. We felt this money was well spent as this would make it better to shop to a builder. Now the County/State wants our family money.
Please advise.